Bitcoin Tumbles Below $100,000 Amid Long-Term Holders' Sell-Off

By: Isha Das

Bitcoin has recently witnessed a significant downturn, dropping below the critical $100,000 mark amidst a selling trend from long-term holders and market-wide selling pressure across major digital assets. On-chain data suggests that Bitcoin's long-term holders, who have been holding their coins for over 155 days, have begun offloading their assets, accelerating the cryptocurrency's price decline. Historically considered resilient, these holders are now taking profits, indicating a shift in market dynamics.

The current climate is compounded by institutional activities showing weakening demand signals. On November 12, US spot Bitcoin ETFs recorded substantial outflows of $278 million, adding to the $961 million in redemptions throughout the month. Such shifts in ETF flows exacerbate market vulnerability to volatility due to reduced institutional support acting as a buffer.

The continuous liquidation of leveraged positions has intensified downward momentum, with total liquidations reaching $655 million. This selling spree has not spared other major cryptocurrencies; Ethereum and Solana have also sustained significant losses. Glassnode's recent analysis points out that Bitcoin has traded below key support levels, such as the short-term holder cost basis of $111,900, representing a bearish market sentiment exacerbated by low liquidity and weak market conviction. The network additionally reports a high ratio of coins sold at a loss, marking a period of capitulation that mirrors previous major market downturns.

In terms of market sentiment, excessive leverage poses additional risk, further evidenced by subdued futures funding rates and declining open interest. Options market data reflects defensive trading strategies, with market participants opting for put options as a buffer against expected volatility. Overall, investor hesitation is high, with key resistance levels at $106,000 to $118,000 creating a supply overhang that could dampen future price rallies unless new capital inflows are realized. Broader financial market conditions, combined with structural barriers above the current price levels, suggest a challenging path forward for Bitcoin and other digital assets.